Catering primarily to auto testing and validation, Automotive Test Systems has established a new tech centre in Bengaluru with intent to focus on EV testing. Ramanathan Srinivasan, Managing Director, Automotive Test Systems gets candid on the plans going forward.
In terms of product testing and validation, how do you see the requirements of the auto industry evolving?
So far in the last few years it was all about things like emissions and performance testing, but what is now emerging is the EV domain as well as ADAS features coming into vehicles. So, there is a lot of testing requirements in these new fields, and probably because of Covid, not many companies have enough capex to once again invest into these areas after investing into BS VI. We found that this was an opportunity and we have been investing into these fields.
We are registering huge demand from existing OEMs as well as a lot of new start-ups which are mushrooming in the field of electric vehicles. These young companies definitely need infrastructure facilities for testing and validation, and that has helped us to get more business.
Is the evolving policy framework around safety and vehicle emissions also enabling demand?
It is creating demand to some extent and this was especially true when demand had peaked during the BS IV to BS VI transition. But demand for our testing equipment is presently more driven by the emerging technologies of electrification, as well as active and passive safety - autonomous and ADAS. A lot of virtual testing for autonomous driving technology for Europe is being conducted in India.
How is Automotive Test Systems serving its customers in India?
We work right from simulation, component testing, through to prototype, end-of-line testing and offer expertise in niche areas such as passive safety and HVAC testing as well.
Apart from supplying test equipment to almost all the major OEMs as well as nodal test agencies in the country, we offer simulation, measurement and engineering services to automakers such as Volvo, Ford, and RNTBCI among others, as well as Tier 1 majors of the likes of Continental, Bosch, KPIT, Tata Elxsi, and TCS.
Of late, a lot of business is also coming from traditional Indian customers including Tata Motors, Mahindra & Mahindra, Ashok Leyland and TVS Motor Company. Therefore, we do a bouquet of business from these players as well, but still 80 percent of the revenue comes from MNCs, which also have different expectations as they already have global data and benchmarks, and have certain set practices which they want to be followed to the letter.
Has the pandemic changed the way vehicle testing is conducted?
I don’t think there has been much change in the overall process. While our entire business was relying on supplying virtual simulation and validation tools to our customers during the first wave of Covid-19, it’s business as usual now since everyone is back in office.
Having said that, we took Covid-19 as an opportunity to invest Rs 20 crore into a new technology centre in Bengaluru. It will focus on EVs and integrated areas like testing of motors, batteries, inverters, as well as structural testing of these vehicles. We will also conduct hardware-in-the-loop (HIL) and software-in-the-loop (SIL) simulations at the Bengaluru technology centre.
While some of the test benches are up and running, a few motor and battery test benches are still in the process of being set up due to delay in equipment coming in because of the global chip shortage. The centre will become fully functional by the end of this year.
Are there other ATS technology centres located within the country?
We started our first technology centre – Amrita Automotive Research and Technology Centre - with Amrita University in Coimbatore eight years ago, and our powertrain testing as well NVH testing departments are based out of this facility. Moreover, the vehicle dynamic testing takes place on test tracks spread across the country. These include facilities like the GARC in Chennai, NATRAX in Indore, and iCAT in Delhi-NCR.
We also have a product development lab in Chennai, where we are trying to develop tools for ADAS testing and validation. We now want to develop this facility into as a centre of excellence for ADAS testing. We plan to invest into a static simulator next year, and upgrade to a dynamic simulator in future.
We have been serving local as well as global automotive companies, especially those from Europe and Japan from our facilities. Each of these centres employ 30-40 engineers working on several projects.
What is the degree of localisation of ATS products?
Majority of our equipment gets imported from our collaborators in Germany and the UK, as well as a little bit from Japan. But, as part of our Make-in-India initiative, we are also indigenously developing a lot of the sensors and test benches.
In this regard, we have acquired a German company – Peiseler – through which we aim to globally sell these high-quality products locally developed and manufactured in India. There are not many Indian companies in this space, especially in the domains of powertrain and vehicle dynamics testing. It’s a capital-intensive field and not many see it as an opportunity to invest.
Is the renewed focus on local design and development pulling sales of ATS products? Are policies like PLI scheme also facilitating sales?
Not yet, but we do see a lot of companies coming forward. This is the reason we have started a new venture called Trontion E-Automotive. The idea is to support these companies looking to make use of the PLI schemes with our engineering services by becoming a system integrator and helping them achieve the targets set by the government.
This is going to emerge as a new business vertical for us in the next couple of years and that’s why we wanted to have a separate focus on vehicle development. We will simultaneously leverage the strengths of our existing testing and validation domain. We are already in discussions for a number of projects in this area and a new team is being incorporated. If all goes well, we will probably set up a new technology centre in Delhi-NCR as well.
What was impact on revenues due to Covid-19? What is your growth outlook for this fiscal?
When the pandemic began, our turnover dropped by 30 percent compared to the year before. But in this fiscal, we expect to close 10 percent more than pre-Covid revenues, including a 20 percent uptick in profits. While 95 percent of the business continues to come from traditional OEMs, start-ups did contribute to the remaining 5 percent. But new companies have already started talking to us, so we expect around 15 percent of the revenues coming from start-ups in the forthcoming year.
This interview was first published in Autocar Professional's February 15, 2022 issue.